BA/bmi merger (was Virgin & Balpa - bmi next ?)

[Walnut]

So if BA now owns all three bmi groups did Lufthansa also sell off??!! the smaller outfits pension schemes along with the main bmi scheme? ie they are all in the PPS orbit even though the company that owns them now BA is not insolvant. A real buggers muddle.

[MaximumPete]

Why didn't MB make it a condition of sale of his shares to LH that should they sell the Company they MUST make adequate funding available for the safeguarding of the Pension Fund at the time of any sale to the third party?

If only life was so simple!

[Yellow Sun]

So if BA now owns all three bmi groups did Lufthansa also sell off??!! the smaller outfits pension schemes along with the main bmi scheme? ie they are all in the PPS orbit even though the company that owns them now BA is not insolvant. A real buggers muddle.

The majority of the members of the Baby and Regional pension schemes will be in Defined Contribution (DC)schemes whereas most(?) bmi employees will have been in the company Defined Benefit scheme. The only issue with the former is whether the employer has kept their contribution up to date; they certainly should have done. The DC schemes do not fall under the remit of the PPF as no promises have been made other than the size of the employer's contribution.

Some members of the Baby scheme who have previous employment with bmi may have a preserved interest in the bmi scheme. Ex-Business Air employees still with Regional may be a bit more complicated, I do not know whether Business Air ever ran a DB scheme, although I believe that they probably moved to a DC scheme in later years.

[MaxRange120]

Struggling employers get lifeline on pensions as funds crisis forces regulator to take action

A financial lifeline will be thrown this week to about 350 companies struggling to fund deluxe final salary pension schemes against the backdrop of a faltering economy. Without the regulator's decision to relax its approach to the funding of pension deficits – estimated to total about £255billion – it is feared that many scheme sponsors would be in danger of failing to meet their pension promises.

Struggling employers get lifeline on pensions as funds crisis forces regulator to take action | Mail Online

BA deal can't stop BMI pension scheme being shifted into protection fund | Mail Online

[MrBenip]

Maxrange - Thanks for putting this on the forum about the pensions regulator. I saw this in the paper today myself. What is going on in the political world? There was a reasonable deal offered by Lufthansa for our pension scheme, a plan backed up by financial advice and that nice Mr Regulator man said no stick it in the PPF. Now this article appears in the newspaper saying he is going to be more pragmatic! I think now the government has said to the regulator, ease up because the PPF is not a bottomless pit and much more burden and it will sink.

I really think this is enough to make the trustees go back to the drawing board with DLH and the regulator guys for a rethink now the regulator is 'being more pragmatic' as this all sucks. But I fear it ain't going to happen. Basically we are shafted, there's a big picture here and we don't figure.

Also in the FT today an article about how BA have got the bargain of the century with the purchase of BMI. I should say so! All the cream that's desperately needed for expansion at a choked LHR whilst the troops get their future (pensions) decimated and BA get us on the cheap to fly the slots. Is that the best they can do? Our old company were pussy cats compared to this lot.

Also I do wish the papers would stop printing that whilst the pilots are enraged they would get a maximum of £35000 odd from the PPF. That is rubbish! 99% of the pilots have a NRD of 60. The compensation is capped on a sliding scale according to retirement NRD. The figure they quote is for an NRD of 65 not 60. Then there is a 10% reduction to apply. A pilot with an NRD of 60 can only expect max of £26000 odd. A far cry from the FS scheme promise that we have paid up to 18% of our salary for in latter years.

[Hand Solo]

The bargain of the century thats losing £3M+ per week? BMI is a basket case and IAG bought the slots, nothing else. I fully sympathise with the position you're in regarding pensions but if you expected IAG to be anything less than ruthless with regards to the insolvent BMI business then you have seriously misjudged the situation. You were going to get a great deal with your future employer, with commands and future promtion prospects protected. Who threw that out of the window?

[MrBenip]

Hand Solo, You seem to credit the BACC with more power than Mr Cameron!
This was all worked out by IAG beancounters from the start I imagine. We have already seen what WW thinks of unions. Why would they cough up more T's & c's because the BACC wanted it? They would not spend a penny more than they had to. I think it is rubbish that nice chats between our CC's would have made much difference to the final outcome.

I think you keep saying this as you do seem to enjoy making us feel like naughty boys getting punished for not doing as we are told by the mighty BACC.

You seem to profess to know the final outcome, well here us guys sit and we are employed by BA and don't know anything about our new terms so you must be well connected or like to sound it.

Your occasional sympathetic gestures would seem more genuine if your posts did not constantly harp on about how we should have cuddled the BACC. It will do your futures no good if we are employed cheaply as WW would wonder why he couldn't get you guys for less, especially now his bonuses were slashed. We are almost getting back to the option you did not vote for. I see this as an own goal on your part.

[Super Stall]

Benip,

You are obviously very angry and rightly so regarding pensions etc., but on a couple of threads you now appear to be lashing out randomly in every direction.

Over the last few years the BACC have in fact been incredibly innovative in finding solutions to the problems we've had at BA (pension's and work coverage are just two). They have also been very succesfull at squeezing money out of BA where previously there was said to be none.

WITHOUT A DOUBT a combined proposal from the CC's would have elicited more money, more harmony, better T's & C's and quite possibly (as it remains to be seen) more jobs from BA/IAG. There is no 'smugness' from anybody on the BA side just an awful lot of frustration towards the 'we know better' BMIcc.

Unsurprisingly you are now going to get a few 'I told you so's' but by God there were enough people screaming on here for the BMIcc to be reasonable, only to be shouted down by the DOJ crowd.

The company you worked for now no longer exists.
It was bankrupt.
It has been rescued by IAG.

None of this is the fault of IAG, BA, Balpa, BAcc or indeed poor Hand Solo, so I would redirect your fury to where it is deserved.

I'm sorry if this sticks in your throat but if you're not careful it's going to eat you from the inside out and make you miserable for the rest of your life.
Fight the pension issue but for the rest, it's time to move on.

[RHINO]

Super stall, BMI was not bankrupt and that is why on so many levels this is a fascinating case. The pension regulator has sent the scheme to the PPF for assessment, this as far as I can tell is a first for a scheme coming from a company that has not had an insolvency event. Particularly gauling is that it appears the trustees their advisors and LH had reached a different outcome. I can clearly understand why long serving BMI pilots (and others) will be spitting tacks over this. BALPA are already managing expectations (downwards IMHO).

If BMI were bankrupt their would be no slots for BA. They would have been returned to the slot allocators.

Something you will get no argument from me is that the BACC have done an outstanding job. Look at the BA(IAG) share price over the last 5 years. A big lose for the owners and quite a decent win for the pilots.....well done the BACC!

[Super Stall]

As I understand it the business unit was losing £3m a week with no cash in the bank. With the state of the FS pension schemes in the UK there would be no buyer willing to take on BMI whilst increasing it's pension exposure. BA with NAPS having already been through two painfull restructuring's would never have considered buying BMI without LH taking on the pension scheme.

BMI was on the verge of being closed and all jobs would have been lost.

Sounds pretty bankrupt to me.

However what I do find incredulous is the way in which LH have been able to walk away from the scheme without making good the shortfall, and for that you have my total and absolute sympathy.

[stormin norman]

Spot on super stall.

The Government should ensure that no financial viable company can walk away from a company it owns without ensuring the accrued benefits of its pension members are assured.

If Gordon Brown ( and labour) hadn't dipped their grubby little fingers into peoples private pension schemes i'm sure the BMI scheme (along with thousands of others) would be in good shape.

[Ancient Observer]

I am concerned that we are only hearing a pert of the story in the media.
If bmi was effectively "bust", why weren't all of its assets sold off by auction, and the funds used to pay off its liabilities - including the old pension scheme? Then, if the wierdy beardy wanted to pay bucket loads of money for slots, he could have bought them - as could the Middle east airlines who would pay well for the slots, and compete better with our legacy airline?
Am I missing something? Why was a done deal announced so the only "assets" of any value went to the UK legacy carrier, rather than being used to fund the pension scheme?

[Super Stall]

If bmi was effectively "bust", why weren't all of its assets sold off by auction, and the funds used to pay off its liabilities

It was auctioned off, IAG won and has taken on BMI's liabilities except the pension fund which LH agreed would remain with them for them to administer.
The question is how LH can then make a token payment and dump the scheme onto the PPF, walk away, leaving the scheme members (and every other UK pension fund (who contribute to the PPF)) to pick up the bill.

It's quite astonishing and disgusting in equal measures.

[Megaton]

If bmi was effectively "bust", why weren't all of its assets sold off by auction, and the funds used to pay off its liabilities - including the old pension scheme?

They were "effectively" bust because IAG chucked in £60M to keep it afloat until the sale was approved by the regulator.

[MaximumPete]

From Airwise on possible redundancies at Lufthansa:-

"Lufthansa has a tradition of dealing with employees in a fair way when it comes to job cuts.." said Lufthansa spokesman

Oh Really????

[MrBenip]

Ancient Observer; You are quite right, there is a bigger picture here I think. The regulator assessed that the amount of money Lufthansa was prepared to put in would not have given the pension long term security, although financial advisors probably believed it would have. If either Lufthansa or IAG were to put any more money into the pot there would have been no IAG/DLH deal so no jobs. (Or would Branson have bought it?????).

So in essence we had sacrificed our pension scheme to save the deal, all done without our knowledge. So the big boys have got away with less than they should have done after promises to maintain the scheme only a short time ago. There must be politics at play here in order for IAG to take most of the slots instead of an outright insolvency of BMI. What would have happened to the slots then I really don't know, but a missed once in a lifetime opportunity for BA would have been lost. The PPF probably agreed to take it on now in case it faced a bigger liability if it had to take the pension scheme on in the future perhaps. Now in Sunday's paper it says the regulator is throwing a lifeline to schemes by being 'more pragmatic' - how bizarre! a turn of coincidence perhaps or a direct result of this case which is appearing in newspapers. Will or would it have affected this outcome now who knows. Is Balpa taking note of this and talking who knows.

What I do know and hope you understand is the utter frustration about being told hardly anything about our T's & C's and final pension outcome to date we are all in a state of limbo at the moment.

I will only comment about the lack of interaction of the BA & BMI cc's by saying the talks were probably started too early because BA management could not enter the arena until they actually owned us and naturally I guess the CC would have liked to have found out their views in order to correctly represent us. That is when everyone should have sat around the table in my view. Hindsight a wonderful thing, they are only pilot reps for goodness sake, not professional negotiators. Does Balpa itself actually figure in this and give advice I wonder, or are they hiding in the trenches while a difficult battle is being fought? coming out when all the flak is over. These are NOT accusations, just questions really.

I have no information other than my perceptions by reading news articles and the internet for clues including these forums.

Super Stall - I am only lashing out at the one or two who append every thread with a told you so attitude. I am not a rep but I can only try and understand their position and they must have so much going on from all sides that life must be very difficult for them at the moment, if they screwed up so be it. At least they did their level best committing all their spare time I would think. With all the foregoing I am in no mood to sit here and let people get away with a smug told you so attitude.

P.S. Thank you for your kind words regarding the pension. (I do not mean that sarcastically) Cheers!

[stormin norman]

'regulator is throwing a lifeline to schemes by being 'more pragmatic'

This is nothing more than a Government proposal to move the problem further into the future.

[FANS]

It was only a few years ago when BA was seriously looked at as an attractive buy-out asset, but alas it was considered a pension scheme with an airline attached!

Whilst today the BMI crew have potentially been unbelievably affected, it has shown what an easy target the crew are – a few of whom have spent all their time arguing over seniority lists whilst £84m has gone out the door and BALPA also appear a hundred steps behind the game.

Given the ease and lack of commotion with which this has been done, then isn't the only question whose next?

[MaximumPete]

Looking at this objectively, surely there must be an EU rule somewhere to protect pensioner funds from this financial abuse.

There seems to a law for everything else!

[MaxRange120]

The bmi pensions action group (BPAG).

The bmi pensions action group (BPAG).

The BPAG has been set up to secure justice following the decision of the UK Pension Regulator to assess the bmi pension scheme for entry into the Pension Protection Fund (PPF) – a move that will mean substantial cuts in pensions for people who have conscientiously paid contributions in the expectation of a reasonable standard of living for them and their dependents in retirement.

And this bmi pension debacle reaches every corner of bmi; existing pensioners and those still working, deferred pensioners, widows and orphans; relatively well paid and lower paid; those in a union and those not. Everyone will suffer and BALPA has made its expertise and resources available to support BPAG and to give those whose pensions and associated benefits are to be cut, a voice.

And this not only affects bmi employees and pensioners. As reported in the Sunday Times “for the first time a large solvent company has been allowed to dump liabilities into the Pension Protection Fund (PPF) and walk away”. Where Lufthansa (the owners of bmi) has trod, others may try to follow. All pension funds will suffer, as all are expected to fund the PPF by way of a levy and yet, in this case, will be required to do so because of the actions of a blue chip company.

BALPA | ABOUT BMI PENSIONS